The function you posted is incorporating the correction I made, but original DeathWolf's function contains:
vflip.crop(0,c.height-16,c.width,0)

It is this zero I was talking about.

Oh btw in the function you have you started with
function gradfunkmirror(clip c, int strength)

but then in ffdshow you don't specify a strength... You should write the header as i did (Function gradfunkmirror( clip c, int "strength" )) if you want to be able to omit the strength parameter when calling the function

I think the original purpose was for encoding (?). But since basically the crappy 12 bit color after encoding the bending will appear there again (a bit less though I would say). But it acts also as a spatial denoiser a bit so it can have some uses in the encoding process, but his great strength is at playback.